Federal Judge Orders Temporary Halt to Medi-Cal Payment Cuts

A U.S. District Court judge in Los Angeles temporarily blocked a 10% cut to Medi-Cal reimbursements for doctors, dentists, pharmacies and other health care providers, the Sacramento Bee reports. Medi-Cal is California's Medicaid program (Yamamura/Sanders, Sacramento Bee, 8/20).

Judge Christina Snyder ruled that the cuts likely would affect Medi-Cal beneficiaries' access to care. Under federal law, state lawmakers are required to consider the effect of Medicaid reimbursement rate cuts on quality and access to care, Snyder ruled, adding that state officials did not show that they had taken into account any factors other than the state budget deficit (Egelko, San Francisco Chronicle, 8/20).

California lawmakers and Gov. Arnold Schwarzenegger (R) approved the rate reductions in February as part of an effort to address the state's estimated $15.2 billion budget deficit.

If the Medi-Cal rate cuts are ultimately rejected, higher reimbursements will add $575 million to the state budget deficit, according to the Department of Finance (Sacramento Bee, 8/20).

The ruling restores fee rates for providers who serve Medi-Cal patients.

According to the Chronicle, many hospitals already were exempt from the cuts (San Francisco Chronicle, 8/20). The ruling excludes some hospitals that do not contract with the state and do not provide emergency care (Sacramento Bee, 8/20).

Snyder ruled that those hospitals had not shown that the lower fees would compromise the care they provide.

The ruling applies to all fees for services provided since July 1, but the Chronicle reports that questions remain over whether the order requires the state to retroactively reimburse providers to make up for the lower payments they have received since July 1 (San Francisco Chronicle, 8/20).

Schwarzenegger spokesperson Lisa Page said the governor's office is reviewing the ruling to determine how to proceed (San Francisco Chronicle, 8/20).